TORONTO (Reuters) - Canada’s main stock index closed nearly flat on Tuesday, as losses in gold stocks were offset by gains in financial issues and fertilizer producers, with investors focused on a European Union summit on Thursday and Friday.
Spain’s short-term borrowing costs nearly tripled and the euro fell as investors feared leaders would make little meaningful progress at the summit on the region’s debt crisis. <MKTS/GLOB> <FRX/>
“The market is very thin. Everyone’s waiting for the summit,” said Irwin Michael, portfolio manager at ABC Funds. “There’s no great impetus to do very much.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 4.03 points, or 0.04 percent, at 11,334.42.
John Kinsey, portfolio manager at Caldwell Securities Ltd, said many investors were on the sidelines ahead of the summit, but he did not see major progress coming out of the meeting.
“They have a track record of just talking and talking, and nothing really concrete comes forward, so I don’t know why this would be anything different,” he said, adding volume was light as investors waited for the summit’s outcome.
Gold retreated in quiet trade, hurt by fears of deflation amid disappointing U.S. consumer confidence data and worries about the escalating euro zone debt crisis. <GOL/>
“There is not a lot of impetus to buy (gold) here,” said Michael. “People are looking for inflation, and we’re not seeing a lot of inflation at this point.”
The heavyweight materials group, which includes gold miners, fell 1 percent. Barrick Gold (ABX.TO) fell 4 percent to C$37.83, and Goldcorp Inc (G.TO) was 1.9 percent lower at C$38.44. The stocks were the two biggest weights on the index.
Financial shares edged 0.4 percent higher after falling on Monday.
Losses in gold were also offset by fertilizer producers. Potash Corp POT.TO rose 3.1 percent to C$43.56, and Agrium Inc AGU.TO was 1.9 percent higher at C$89.56 as the price of corn jumped.
Corn rose by the daily maximum 40 cents on Monday as an unexpectedly hot, dry spell this week damaged crops that are already in their worst condition in 24 years. <GRA/>
Shares of the fertilizer makers typically track the price of fertilizer-intensive corn closely as higher grain prices are likely to spur farmers to increase their use of crop nutrients.
Centerra Gold (CG.TO) saw its stock jump 11.8 percent to C$10.05, partially recovering from last week’s sharp drop over uncertainty about the future of its flagship Kumtor mine in Kyrgyzstan.
Oil and gas company Nexen Inc NXY.TO said it has taken less time than expected to start producing at a section in its Long Lake project in Alberta. Its stock closed up 4.1 percent at C$16.40.
Outside the main index, coal miner SouthGobi Resources Ltd (SGQ.TO) said uncertainty over its licenses in Mongolia is making it difficult to estimate sales volumes and pricing for the year. Its shares dropped more than 25 percent to C$4.00.
Editing by Jeffrey Hodgson